Support for H.R. 1815, the “SEC Disclosure Effectiveness Testing Act”

The Financial Planning Coalition submitted a second letter of support regarding H.R. 1815, the “SEC Disclosure Effectiveness Testing Act.” The Coalition is particularly pleased that the modified legislation continues to include a requirement for qualitative testing in the form of one-on-one cognitive interviews of investors. Research conducted on behalf of the Coalition and others showed that this type of cognitive testing assesses investors’ ability to integrate information and synthesize it into a rational evaluation, and thus is the only proven way to determine whether a proposed disclosure document will achieve its intended purpose.

The Coalition appreciates the work the U.S. Securities and Exchange Commission’s (SEC) Office of the Investor Advocate has done to identify and confront the challenges to improve investor disclosure. We encourage Members of Congress to support the legislation when it is considered on the House floor.